Category: General
Country: India
Region: Asia
Of the Rs 5272 crore allocated in the 2025-26 budget for the Textile industry, Rs 635 crores will be used to upgrade the technology that is used by the textile industry under the Amended Technology Upgradation Fund Scheme (ATUFS).
By OpIndia Staff
3 February, 2025
On Saturday, 1st February, the Union Budget presented by Finance Minister Nirmala Sitharaman gave a big boost to the textile industry announcing a 19% increase in the Budget Estimates for AY 2026-27. The BJP-led government allotted Rs 5272 crores to the Ministry of Textiles this year as compared to Rs 4417.03 crores in the Financial Year 2024-25.
Additionally, the government has decided to boost cotton production and has announced a five-year Cotton Mission. Amid this, the government has decided to address the challenges of stagnant cotton productivity, especially extra-long staple varieties.
“Science and technology support will be provided to farmers under this Mission. The Mission will increase the farmers’ income and augment a steady supply of quality cotton,” the Ministry of Textile was quoted as saying. Notably, India’s mission to rejuvenate India’s traditional textiles comes at a time when the country has no surplus in the cotton production sector. At present the country yields 450-kilogram per hectare, which is the lowest against a global average of 800-kilogram plus.
Fund for technology upgrade
Of the Rs 5272 crore allocated in the 2025-26 budget for the Textile industry, Rs 635 crores will be used to upgrade the technology that is used by the textile industry under the Amended Technology Upgradation Fund Scheme (ATUFS). In addition to this, the Finance Minister further gave a boost to the industry by issuing a list of exempt pieces of machinery and looms used for textile production.
ATUFS was founded in the year 2016 and is now also known by the names of the Modified Technology Upgradation Fund Scheme (MTUFS), Restructured Technology Upgradation Fund Scheme (RTUFS) as well as the Revised Restructured Technology Upgradation Fund Scheme (RRTUFS).
The scheme aims to boost the ‘Make In India’ initiative and ease of doing business by promoting exports and job creation, particularly for women. It also aims to focus on zero effect and zero defect in manufacturing. The scheme also aims at reducing focus on imports from other countries, further encouraging improved quality in textile processing.
How Bangladesh crisis may help India in Textile sector
Interestingly, the ongoing political crisis in the neighboring country of Bangladesh is aiding India’s garment industry to flourish by enhancing exports. Bangladesh used to be the second largest exporter of garments but the sector in the neighbourinfg country is looking at uncertainties amid a financial crisis, power crisis and violece. After the fall of the Sheikh Hasina-led government, India has scope to enhance increased cotton exports to the USA, UK, France, Spain, Italy, Netherlands, etc.
The ongoing political turmoil has affected its garment industry forcing the importing countries to look for alternative sources. Following this, India has emerged as a key beneficiary of the shift experiencing an increase in its textile and apparel products. As per the reports, between January and November 2024, India’s garment exports to the US rose by 4.25% to $4.4 billion, while Bangladesh’s exports to the US declined by 0.46% to $6.7 billion.
Amid this, the Indian government is making efforts to bolster the textile industry. This includes providing financial support, tariff reductions on raw materials and machinery, and incentives to encourage local production.
As per the economic survey published on 1st February, India is the sixth largest exporter of textiles and apparel globally, contributing significantly to the Gross Domestic Product of the country, industrial production, and exports.
“India exported textile items worth USD 34 billion in 2023, with apparel constituting 42% of the export basket, followed by raw materials semi-finished materials at 34% and finished non-apparel goods at 30%. Europe and the US consumed nearly 66% of India’s apparel exports, 58% of finished non-apparel goods, and 12% of raw materials semi-finished materials. Other prominent destinations include the UK (8%) and the UAE (7%). The Survey points out that textile exports remained resilient throughout the COVID-19 period (2020 to 2022),” the survey read.
In the year 2024, the government stated that India’s textile industry is expected to grow to USD 350 bn by 2030 and add 3.5 crore jobs.
On Saturday, 1st February, Union Finance Minister Nirmala Sitharaman presented the Budget for the Financial Year 2025-2026. The budget, which has been framed to benefit the middle class, highlighted key proposals and schemes for the betterment of several sectors. These include agriculture, health, education, law and order, finance, business, infrastructure and more. The detailed report on these can be read here.
Courtesy: Opindia.com
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